Business Acquisition

12 Months Ended

Dec. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

On November 1, 2024, the Company entered into a definitive purchase agreement for a 65% ownership interest in Skyland for $85.0 million, subject to customary working capital adjustments. Skyland operates grain storage and handling facilities in Kansas, Colorado, Oklahoma, and Texas. It also operates three cotton gins, a full-service agronomy sales and service division, and a retail and wholesale fuel sales and delivery division. The purchase was completed on November 1, 2024, and funded by cash on hand. The transaction enables the Company to expand its core grain and fertilizer businesses across strategic markets, including Kansas, Oklahoma, Colorado, and Texas. The Company's 65% ownership of Skyland's equity resulted in the consolidation of Skyland’s results in the Company's Consolidated Financial Statements in both the Trade and Nutrient & Industrial segments.

The purchase price allocation is preliminary. We are in the process of completing the purchase price allocation associated with the Skyland business combination and as a result, the provisional measurements of the assets and liabilities acquired are subject to change. During the measurement period, we will continue to obtain information to assist in finalizing the fair value of assets acquired and liabilities assumed, which may differ materially from these preliminary estimates. If we determine any measurement period adjustments are material, we will apply those adjustments, including any related impacts to net income, in the reporting period in which the adjustments are determined.

A summary of the preliminary purchase price consideration and preliminary purchase price allocation as of December 31, 2024, is as follows:


(in thousands)
Cash consideration paid	$	85,000
Total purchase price consideration	85,000

Cash and cash equivalents	$	65,388
Accounts receivable	47,963
Notes receivable	2,868
Inventories	220,547
Other current assets	21,396
Right of use assets	14,549
Other assets, net	1,334
Investments	12,932
Property, plant and equipment, net	136,199
	523,176

Trade and other payables	74,528
Short-term debt	218,989
Current maturities of long-term debt	11,247
Accrued expense and other current liabilities	14,099
Other liabilities	14,992
Long-term debt	58,552
	392,407
Noncontrolling interest	45,769
Net assets acquired	$	85,000

The fair value in the opening balance sheet of the 35% noncontrolling interest in Skyland was estimated to be $45.8 million. The fair value was estimated based on 35% of the total equity value of Skyland based on the transaction price for the 65% stake in Skyland, considering the consideration transferred noted above. Acquisition costs incurred were $2.4 million and recorded in Operating, general and administrative expenses in the Statements of Operations.

Pro Forma Financial Information (Unaudited)

The summary pro forma financial information for the periods presented below gives effect to the Skyland acquisition as if it had occurred at January 1, 2023.


	Year ended December 31,
(in thousands)	2024		2023
Net sales	$	11,932,528	$	15,865,304
Net income	170,592		24,858

Pro forma net income was also adjusted to account for the tax effects of the pro forma adjustments noted above using a blended federal, state, and local tax rate of 25%.

Pro forma financial information is not necessarily indicative of the Company's actual results of operations if the acquisition had been completed at the date indicated, nor is it necessarily an indication of future operating results. Amounts do not include any operating efficiencies or cost savings that the Company believes are achievable.